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Econometrics

Econometrics is a specialized branch of social sciences in which various tools of mathematics and statistics are used and it helps in analyzing economic problems. Econometrics is basically concerned with the experimental verification of economic theory. It is method to define the relationship between key economic factors such as wages, capital, population, bank interest rates, and fiscal & monetary policies. It is a method to study economic relationships formed by a combination of economic theory and statistical techniques.

The author Wooldridge has defined Econometrics as:

"The development of statistical methods for estimating testing economic theories, economic relationships, and evaluating and implementing government and business policies."

Scope for Students

Mastering in econometrics helps an individual in determining and successfully carrying out the procedure which includes correct specification of models, manipulation of data to avoid errors knowledge of various methods of estimation, and testing of hypothesis.

In real practice economic relationships are tested by using combination of statistics and economic theory.

Statistical methods which are used in Econometrics are as follows:

Linear regression

Regression analysis

Various Data Sets to which Econometric Analyses can be applied:

Time-series data

Panel data

Cross-sectional data

Multidimensional panel data

Classification of Econometric analysis(based on number of relationships modeled):